Category: Sales, Gas and Excise Taxes
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Neva Butkus
State Policy AnalystNovember 26, 2024
Average Louisianans Will Pay for Gov. Landry’s Tax Break for the Rich
Tax cuts for the wealthy and corporations will not make Louisiana more competitive. Rather, they will blow a hole in the state budget while asking low- and middle-income working families to make up the difference. Gov. Landry and the Louisiana legislature would make much better use of their time looking for ways to make Louisiana’s tax structure fairer and more capable of adequately funding important priorities. -
Amy Hanauer
Executive DirectorNovember 12, 2024
Taxing Transportation Is One Great Way to Reduce Carbon Emissions
Federal, state, and local tax codes are important but underused tools that can create a more climate-resilient, less carbon-emitting America. A modernized tax code would stop subsidizing emissions and instead encourage lower-carbon design. Because cars and trucks produce roughly one-fourth of US greenhouse gas emissions, transportation taxation is a great starting point. -
Jon Whiten
Deputy DirectorAs we approach November’s election, voters in several states will be weighing in on tax policy changes. The outcomes will impact the equity of state and local tax systems and the adequacy of the revenue those systems are able to raise to fund public services. -
Aidan Davis
State Policy DirectorJuly 18, 2024
Five Tax Takeaways from 2024 State Legislative Sessions
Major tax cuts were largely rejected this year, but states continue to chip away at income taxes. And while property tax cuts were a hot topic across the country, many states failed to deliver effective solutions to affordability issues. -
Neva Butkus
State Policy AnalystMeaningful investments in Indiana’s future require a smart, and fair, tax code that recognizes current economic realities and can raise a sustainable stream of funding from those most able to pay. -
Marco Guzman
Senior Policy AnalystThis year, 19 states will forgo a combined $1.6 billion in tax revenue on sales tax holidays—politically popular, yet ultimately ineffective gimmicks with minimal benefits and significant downsides. -
Marco Guzman
Senior Policy AnalystTwenty states this year have decided to go so far as to forgo a combined $1 billion in vital tax revenue in favor of conveniently popular yet ultimately ineffective sales tax holidays. Whether it’s a state looking for a way to help families manage the rising cost of goods or to celebrate back-to-school shopping season, these policy options are poorly targeted and an inadequate use of state tax revenue that could be doing more to make childcare more affordable, health care more accessible and high-quality education available to everyone. -
Carl Davis
Research DirectorIn 2021, the 11 states that allowed legal sales within their borders raised nearly $3 billion in cannabis excise tax revenue, an increase of 33 percent compared to a year earlier. While the tax remains a small part of state budgets, it’s beginning to eclipse other “sin taxes” that states have long had on the books. -
Many states are making the decline in sales tax collection worse by failing to apply their sales taxes to digital goods (such as downloads of music, movies, or software) and services (such as digital streaming). A state that taxes movie theater tickets but not digital streaming, for instance, is needlessly hastening the decline of its own sales tax. -
One pressing question is what will an economic downturn in which consumers are anxious, facing job loss, or simply spending their time sheltering in place and not spending money in typical ways, mean for states’ ability to raise revenue? -
Carl Davis
Research DirectorMarch 6, 2020
Talking Taxes in Alaska
Alaska’s tax system underwent major changes in the 1970s when oil was found at Prudhoe Bay. Lawmakers repealed the state’s personal income tax (making Alaska the only state ever to do so) and began balancing the state’s budget primarily with oil tax and royalty revenue instead. But as oil prices and production levels have declined, a yawning gap has opened between state revenues and the cost of providing vital public services. -
Carl Davis
Research DirectorItemized deductions are problematic tax subsidies that need to close. The mortgage interest deduction, for instance, is often lauded as a way to help middle-class families afford homes and charitable deductions are touted as incentivizing gifts to charitable organizations. But the dirty little secret is that itemized deductions primarily benefit higher-income households while largely failing to achieve their purported goals. -
Carl Davis
Research DirectorThe last few years have brought major improvements in how states enforce their sales tax laws on purchases made over the Internet. Less than a decade ago, e-retailers almost never collected the sales taxes owed by their customers. The result was a multi-billion dollar drain on state coffers and a competitive disadvantage for local businesses. But this holiday season looks a bit different. -
September 26, 2019
Maine Reaches Tax Fairness Milestone
Lawmakers in Maine this year took bold steps toward making the state’s tax system fairer. Their actions demonstrate that political will can dramatically alter state tax policy landscape to improve economic well-being for low-income families while also ensuring the wealthy pay a fairer share. -
Carl Davis
Research DirectorNew tax data out of California, the world’s largest market for legal cannabis, tell a complicated story about the cannabis industry and its tax revenue potential. Legal cannabis markets take time to establish, and depending on local market conditions, the revenue states raise can vary significantly. -
Carl Davis
Research DirectorCannabis tax revenue is becoming more significant as legal sales grow. The tax is far from a budgetary panacea, but an ITEP analysis of revenue data reported by the seven states with legal cannabis sales underway suggests that excise and sales tax revenues from the sale of the drug could reach $1.6 billion this year. -
Dylan Grundman O'Neill
Senior Policy AnalystSales tax holidays are wasteful, misguided policies that will drain more than $300 million of funding away from shared priorities like schools, roads, and health care this year in 16 states, while delivering little benefit to the families that could most use the help. Our newly updated brief reviews recent developments in sales tax holiday policy—including how online sales taxes are changing the picture—and explains why they are a misguided policy option for states. And the story below “follows the money” to show how sales tax holidays are a bad deal for families and communities alike. -
Carl Davis
Research DirectorThe last few years have brought big changes to sales tax collection for purchases made at Amazon.com and other e-retail websites. As recently as 2011, Amazon was only collecting sales tax on its direct sales in five states – a fact that gave the company a competitive edge over brick and mortar stores during a critical time in its growth. Today, Amazon is collecting state-level sales taxes on all its direct sales, but it still usually fails to collect sales tax on the large volume of sales it makes through the “Amazon Marketplace.” This points to a broader problem in state tax enforcement that lawmakers should move quickly to address. -
Carl Davis
Research DirectorOn July 1, 12 states will boost their gasoline taxes and 11 will boost their diesel taxes. The reasons for these increases vary, but they’re generally intended to fund maintenance and improvement of our nation’s transportation infrastructure–a job at which Congress has not excelled in recent years. -
Carl Davis
Research DirectorThe upcoming Memorial Day weekend marks the start of the traditional summer driving season. In most states, summer road-trippers are paying more gas tax than they did a few years ago and are benefiting from smoother and safer roads as a result. In total, 30 states have raised or reformed their gas taxes in the last six years. -
Carl Davis
Research DirectorFebruary 26, 2019
Overdue Gas Tax Hikes are Back on the Agenda in Statehouses
State tax policy can be a contentious topic, but one issue on which lawmakers largely agree is that higher gas tax rates are necessary to keep our nation’s infrastructure operating safely and efficiently. Lawmakers in 27 states have approved gas tax increases since 2013. -
Carl Davis
Research DirectorThis year lawmakers in Connecticut, Delaware, Hawaii, Illinois, New Jersey, New York, Rhode Island, and Vermont will all be debating the taxation of recreational cannabis. A new ITEP report reviews the track record of recreational cannabis taxes thus far and offers recommendations for structuring cannabis taxes to achieve stable revenue growth over the long haul. -
Aidan Davis
State Policy DirectorState and local tax systems in 45 states worsen income inequality by making incomes more unequal after taxes. The worst among these are identified in ITEP’s Terrible 10. Washington, Texas, Florida, South Dakota, Nevada, Tennessee, Pennsylvania, Illinois, Oklahoma, and Wyoming hold the dubious honor of having the most regressive state and local tax systems in the nation. These states ask far more of their lower- and middle-income residents than of their wealthiest taxpayers. -
Carl Davis
Research DirectorSeptember 25, 2018
An Unhappy Anniversary: Federal Gas Tax Reaches 25 Years of Stagnation
The federal gas tax was last raised on Oct. 1, 1993, the same year that the classic movie Groundhog Day was unveiled to the American public. In the film, Phil Connors (played by Bill Murray) gets caught in a time loop and spends decades reliving the same cold, February day in Punxsutawney, Penn. Those of us lamenting the 25-year stagnation of the federal gas tax can’t help but feel some of that same sense of repetition. Federal lawmakers occasionally discuss updating the gas tax, but top lawmakers have yet to put in the effort needed to shepherd such a change into law. In fact, after passage of a top-heavy income and estate tax cut last year, the chances of boosting the federal gas tax anytime soon are probably slimmer than ever. -
August 7, 2018
Updating Sales and Excise Taxes to Reflect Today’s Economy
Consumers’ growing interest in online shopping and “gig economy” services like Uber and Airbnb has forced states and localities to revisit their sales taxes, for instance. Meanwhile new evidence on the dangers and causes of obesity has led to rising interest in soda taxes, but the soda industry is fighting back. Carbon taxes are being discussed as a tool for combatting climate change. And changing attitudes toward cannabis use have spurred some states to move away from outright prohibition in favor of legalization, regulation and taxation.
Blog Categories
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- Taxing Wealth and Income from Wealth
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